text: Liverpool City Council's chief executive Ged Fitzgerald and leader of the Conservatives at Lancashire County Council Geoff Driver were among four men held on Monday.
  The probe is looking into financial irregularities at Lancashire council.
  Liverpool mayor Joe Anderson said Mr Fitzgerald had not been suspended or faced any disciplinary process.
  He added Mr Fitzgerald would also be relinquishing his role as interim head of paid service for the Liverpool City Region Combined Authority during the investigation.
  "This decision has been accepted as the right decision for the city and to enable the council to deliver services without distraction," said Mr Anderson.
  "There is no intention to appoint an interim chief executive and the requirements of the role will be covered by myself as executive mayor supported by the senior management team in this period."
  Mr Anderson said Mr Fitzgerald had been bailed by police.
  Lancashire Constabulary said the arrests at addresses in Preston and Merseyside were made on suspicion of conspiracy to pervert the course of justice and witness intimidation, but not on suspicion of fraud.
  The investigation, which was launched in 2013, relates to allegations of financial irregularities over the tendering of a Â£5m contract with One Connect Ltd, a joint venture between the council and BT to run some services.
  The deal included running the council's fleet of vehicles which was agreed by Lancashire's Conservative administration, then led by Mr Driver.
  The contract was revoked later that year by the new Labour administration.
  Mr Fitzgerald was the chief executive at Lancashire before he left to take up the same post at Liverpool City Council.
target: A council chief executive has stepped aside from his role after being arrested as part of a fraud probe.